With plastics plant as the setting, Harper addresses fears over foreign hoarding
Prime Minister Stephen Harper used Markham, Ont.-based auto parts maker Novo Plastics Inc. as the backdrop for an April 13 announcement that Chinese and other state-owned firms hoping to buy Canadian resource firms must show that they operate...
Prime Minister Stephen Harper used Markham, Ont.-based auto parts maker Novo Plastics Inc. as the backdrop for an April 13 announcement that Chinese and other state-owned firms hoping to buy Canadian resource firms must show that they operate on an acceptable commercial basis.
“We have changed some of our rules, so that we can assess whether, when a state-owned company is involved in a takeover, whether it is doing so according to commercial criteria,” Harper said during a press conference at Novo Plastics. “If the transaction is based on commercial criteria and they intend to engage in true commercial operations, that’s obviously very different than if we think there are non-commercial objectives to the takeover.”
In 2007, the Harper government issued new guidelines for takeovers by state-owned enterprises. The guidelines mandated that state-owned firms identify their controlling shareholders, including any indirect or direct state control; and also that companies show they adhere to “Canadian standards of corporate governance,” including commitments to financial disclosure, independent board members and Canadian laws.
Foreign takeovers by Chinese state-owned firms have become a controversial issue in recent years, as Chinese firms have purchased resource producers around the world. Critics contend that Chinese buyers might take advantage of the expansion to hoard key commodities, such as crude oil and copper. Last year, the Harper government blocked the attempted foreign takeover of the Potash Corp. of Saskatchewan Inc., a fertilizer giant that mines potash in Saskatchewan.
After speaking with reporters, Harper toured the Novo Plastics facility and tried his hand at several pieces of equipment. Novo Plastics molds a variety of engineered plastic products and assemblies for both the automotive and consumer/commercial industries.